Are You Ready
for Another Lost Decade?
How to Prosper in the
Current Bear Market
By: Evaldo Albuquerque
Editor of Retirement Strategist

Perma Bear
Perma Bull

Buy & Hold Doesn’t Work
in Bear Markets
Understanding secular bull and bear markets
Six reasons why secular bear market isn’t over
What could cause the next downturn
Why you need a flexible investment strategy
Using the six stages of business cycle
Three investment ideas

Buy and Hold Works in Bull Markets,
But Not in Bear Markets
Secular Bull Markets:
Multi-year uptrend
Few recessions
Low volatility
1,220%
Secular Bear Markets:
Multi-year downtrend
Frequent recessions
High volatility

S&P 500 Index is up 5%
in Last 13 Years

The Debt Super Cycle
U.S. Debt as a % of GDP

P/E Ratio Says
Bear Market is Not Over

Dividend Yield Says
Bear Market Isn’t Over
Dividend
Price
= Dividend Yield
1%

Tobin’s Q Says
Bear Market isn’t Over

Why This Bear Market
Could Last Until 2018
Average bear market lasts 18 years…
And has four recessions
Current bear market started from extreme levels

What Could Cause
the Next Downturn?
European Debt Crisis
Chinese Real Estate Bubble
Another Sovereign Crisis (Japan?)
A Decline in Profits
The End of Fed’s Money-Printing

Profits are 70%
Above Historical Norms
Corporate Profits /GDP
Subsequent 5-Year Growth in Profits

The Money-Printing Boom
“Devaluing a currency is like peeing in bed. It feels good at first, but pretty soon it becomes a real mess.”
—Francesco Guerrera, The Wall Street Journal

 
"Nobody has the experience of successfully navigating a return home from the place in which we now find ourselves. What I'm concerned about is that we may be painting ourselves into a corner. We've done a lot ... It's not clear to me how we are going to get out of this.“

Should We Trust Bernanke?
October 2005: “Housing price increases largely reflect strong economic fundamentals.”
February 2006: “House prices will probably continue to rise.“
March 2007: “Problems in the subprime market seems likely to be contained.”
January 2008: "The Federal Reserve is not currently forecasting a recession.”
June 2008: "The risk the economy has entered a substantial downturn appears to have diminished over the past month or so."

Why Jim Rogers
Isn’t Buying Stocks


“It is very artificial. If you give me a
trillion dollars, I'll show you a good time
too and a lot of people are having a
good time. I know it's going to end
badly. I'm certainly not investing in the
U.S., because the U.S. is making all-time
highs based on money printing.”

Option #1: Buy and Hold

Option #2: Get Out of the Market

Option #3: Flexible Strategy

Example of Stage V in 2007
S&P 500 Index
Energy Stocks
Commodities

Where Are We in the Business Cycle?

3 Ways to Play Stage III
Technology Sector
Technology Select Sector SPDR (XLK)
Platinum & Palladium
Sprott Physical Platinum and Palladium (SPPP)
Short the Japanese Yen
ProShares UltraShort Yen (YCS)

Buy & Hold Doesn’t
Work in Bear Markets
Understanding Secular Bull and Bear Markets
Why the secular bear market isn’t over
P/E ratio is too high
Dividend yield is too low
Tobin’s Q ratio is too high
Why you need a flexible investment strategy
Using the six stages of business cycle